OFFlCE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 

lion. George 

Comptroller 

Austin, Texas 

kl. Sheppard 

of Public Accounts 

Dear Sir: 

dpinionX0. C-1666 

Be: whether 2C$ award tax is due upon 

prizes given at Zlks.Lodge party. 

In your letter of December 12, 1939, you submit 

the following facts: 

'B. P. 0. I&, Elks Lodge No. 216, San Antonio, 

have.~planned a Christmas party and dance to be 

held Deceniher 19 which is open to the general 

public and at which time they will give prizes 

consisting of two automobiles? a frigidaire, a 

trip~to Cuba with expenses pad as well as many 

other cash and merchandise prizes. The purpose 

of the party, ,to which fan admission is charged, 

is to raise money for crippled and underprivileged 

children and many other Charitable organizations. 

The prizes will be awarded under the following 

procedure. Tickets are being sold by means of 

a punch board to the general public at prices 

ranging from I# to 25#. The ticket entitles the 

purchaser to a chance on one or more prizes. 

"The purchaser punches one of the holes in 

the punch board which may contain any number from 

number 1 to number 25. The purchaser is required to pay for the ticket in an amount equal to 

the nuder he punches from the board. As an 

example, if he punches number 1, he is required 

to payI{ for the ticket; if he punches number 

25, he is required to pay 25~! for the ticket. 

*The night of the party the tickets bearing 

the purchasers' nams will be placed in a container or receptacle from which they will be 
Hon. Geo. H. Sheppard, Page 2 

Brawn by soms disinterested person, one by 

one, until all the prizes have been awarded. 

An admission charge is also n&e to the 

party but the winner does not have to be 

prosent when the prizes are awarded in order 

to receive a prize." 

In your letter ofDecember 16, 1939, you give us 

the additional information that the party is not to be held 

in the lodge hall of the Elks Lodge, but will be held upon 

the stage of the hiunicipal Auditorium of the city of San 

Antonio. 

You request our opinion as to whether or not the 

prizes to be so awarded will be subject to the 2C$ award 

tax levied by Article 7G47f, Vernon's,Civil Statutes, which 

reads, in part, as follows: 

"(a) Bvery person, firm, or corporation conducting a theatre, place of amusement, or any business enterprise in connection with the operation of which a prize 

in the form of money or something of value 

is offered or given to one or more patrons 

of such theatre, place of amusement, or 

business enterprise, and not given to all 

patrons thereof paying the same charge for any 

certain service, commodity, or entertainment, 

shall make a verified monthly report on the 

twenty-fifth day of each month to the Comptroller of Public Accounts of the State of Texas? showing the amount of money so given in 

prizes, and the value of all @.zes or awards 

so given in connection with such business during the next preceding month. 

'(b') There is hereby levied a tax equal to 

twenty per cent (26) of the value of all such money, 

prizes, an& awards given in connection with the operation of each and all of the foregoing business 

enterprises, an& at the time of -king the report 

to the Comptroller of Public Accounts, the owner 

or operator of any such business shall pay to the 

State Treasurer such tax upon the total amount 

of money, prizes, and awards so given during the 

next preceding month. Q fi 0" 
?c&. Gee. H. Sheppard, Page 3 

From a reading of the above statute, it is seen 

that not every award or prize is taxable thereunder. The 

statute does not purport to levy such tax unless the prize 

is offered or given in connection with the operation of a 

theatre, place of amsement , or some business enterprise. 

We have heretofore pointed Out that the mere occasion of 

making the award cannot in itself provide the business 

enterprise in connection with the operation of which such 

prize is given. Tax laws are to be construed striotly. 

Yellow Cab Company v. Pengilly, 11 S. W. (26) 660; State 

v. San Patricia Canning Company, 17 S. W. (2d) 160. 

It is our opinion that these prizes will not be 

subject to the tax of Article 7047f, Vernon's Civil Statutes. 

Yours very truly 

ATTORNEY G:GNmAL OF TEXAS 

BY 

(Signed) Glenn R. Lewis 

Assistant 

GRL, pbp 

APPROVED- Dec. 23, 1939 

(Signed) Gerald C. Mann 

ATTORNEY GENERAL OF TEXAS 

APPROVED -- Opinion 

Oommittee - By BWB, 

Chairman